According to Cryptocoin, open interest in bitcoin derivatives markets has declined over the past three months, resulting in diminishing returns that have become increasingly important to the overall market structure.

The 31% drop in open interest (OI) on bitcoin derivatives since October is a “delete signal” that helps clear the excess gains the market has built up, said On-chain analytics provider Wednesday.

“Historically, they often mark critical bottoms, effectively resetting the market and creating a solid base for a potential bullish recovery,” said crypto analyst “Dark Fawcett.”

The analyst said that could be the case again, but warned that if Bitcoin (BTC) slips into a bear market and fully enters, “open interest could contract further, signaling deeper deleveraging and a potential extension of the correction.”

OI refers to the number or value of crypto derivative contracts that are still settled and “open”. Deletion is meant to neutralize risky positions, reducing the risk of liquidation shocks that could trigger a sharp drop in prices, as seen in the October 10 crash.

Bitcoin open interest to triple in 2025

The analyst noted that last year’s crypto derivative “speculative frenzy” led to an increase in open interest in bitcoin, which reached a high of more than $15 billion on Oct. 6.

During the peak of the previous bull market in November 2021, BTC open interest on Binance was $7.7 billion, meaning that OI nearly tripled in 2025.

Related: Bitcoin tops 97k over 2026, data shows plenty of fuel for higher prices

During a price rally with open interest, this often means that leveraged short positions are being liquidated or closed.

Traders who bet against Bitcoin are exiting their positions at a loss, which takes selling pressure off the market. This “short squeeze” scenario could accelerate because it suggests that price increases are driven by spot buying rather than excessive leverage, making the rally more sustainable.

That seems to be the case at the moment, as spot BTC prices are up nearly 10% since the start of the year.

Derivatives are not yet in a bull market

Total Bitcoin OI across all exchanges and all derivatives markets is currently around $65 billion, According to That’s down 28 percent from a peak of just over $90 billion in early October, according to the cryptocurrency’s percentage decline data.

On Deribit Bitcoin Options Markets, there is OI Most of all ,000 at a strike price of 100,000, which has a theoretical value of $2.2 billion, suggesting that traders are bullish because there are more long (calls) bets than shorts (puts).